Accountant Admits Double-billing Firm

October 15, 1992|By Laurie Cohen.

Kenneth Solomon, once one of Chicago`s most influential accountants, admitted Wednesday that he bilked his firm for eight years by submitting some of his expense accounts twice, but said he was at a loss to explain why.

Solomon, who headed Laventhol & Horwath`s Chicago office until a bitter break in 1990, has been charged with improperly collecting $22,136 between 1982 and 1990 by the Illinois Attorney Registration and Disciplinary Commission, the state agency charged with investigating lawyer misconduct.

Solomon is an attorney as well as a certified public accountant. This would be the first disciplinary action against an Illinois lawyer involving expense-account abuses, commission officials said.

At a four-hour hearing Wednesday before a commission panel, the agency`s counsel, Peter Rotskoff, said Solomon double-billed the now-defunct Laventhol 154 times over eight years for expenses at fancy restaurants and hotels. In 91 of those instances, Solomon changed the name of the client he was entertaining when he submitted the second expense report, Rotskoff said.

``This was not a mistake, this was not carelessness. It was planned, deliberate conduct,`` Rotskoff said. He described Solomon`s actions as

``theft, plain and simple. He stole money from his own firm`` by first submitting a receipt for an expense, then later a credit-card statement.

Solomon, now a partner at the Chicago law firm of Shefsky & Froelich, told the hearing panel that he was sorry and that he didn`t need the money because he was earning $200,000 to $300,000 a year.

But he also said he has no explanation for the double-billing, which he said amounted to less than 10 percent of his expenses and didn`t affect any client. And he produced some high-powered character witnesses to argue that he shouldn`t be punished too severely for it.

``I`ve wracked my brain,`` Solomon said. ``It was petty. It made no sense. . . . What I did is wrong. There is no justification for it.`` He said he has met with two psychologists to try to figure out why he did this, and one of them suggested he might have had ``a deep-seated resentment`` against the firm for forcing him to travel frequently.

The hearing panel, composed of three lawyers, will make a recommendation to the Illinois Supreme Court on what disciplinary actions, if any, should be taken. Rotskoff urged the panel to recommend that Solomon`s law license be suspended for at least two years.

But William J. Martin, who represented Solomon at the proceeding, said his client deserves only censure. ``I ask you not to judge him harshly for this encapsulated aberration weighed against a lifetime of good works,``

including various professional and charitable activities, Martin said.

The case against Solomon involves no allegations concerning the practice of law. Instead, he is charged with violating lawyer ethics rules barring fraud and ``conduct prejudicial to the administration of justice.`` Penalties can range from censure to disbarment.

The double-billing scheme came to light after Solomon`s bitter break with Philadelphia-based Laventhol in 1990. Solomon, now 50, headed the firm`s Chicago office for 13 years, building the operation into the city`s sixth-ranking accounting practice, from No. 16. He was chairman of the firm`s policy-setting national council for 10 years and was widely regarded as the top candidate for chief executive in late 1989.

But Solomon quit the firm in January 1990, after being passed over for CEO and failing to win re-election to the national council. At the time, sources at the accounting firm said many other partners blamed Solomon for legal problems that ultimately helped push Laventhol into bankruptcy in November 1990.

Michael Zavis, co-managing partner of the Chicago law firm of Katten Muchin & Zavis, testified in Solomon`s behalf. He said Laventhol audited Solomon`s expense reports only as part of a dispute about compensation after he left the firm.

After the audit revealed double-billing, Solomon sent a check to Laventhol. Zavis said the firm neither cashed nor returned the check, but subsequently threatened to file a complaint with the commission.